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Mar 31, 2008

Paul Cianciolo

Priyanka Dwivedi

Christopher Greco

Young Jang

Derrick Peña

Getting back to our roots

Starbucks’s Stock Price HasDecreased 50% in The Past Year

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Stock Price($)

Source: http://Finance.yahoo.com

Mar 2007

Mar 2008

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-50%

PROBLEM

Starbucks’ Revenue Growth Has BeenSlowing For Three Years

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(%)

Source: Starbucks fiscal 2007 annual report

PROBLEM

Starbucks’ Faces Growing Competition

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the $22 billion-a-year restaurant GoliathMcDonalds Dunkin' Donuts

PROBLEM

Starbucks Can Increase Sales Growth By Implementing Three Strategic Initiatives

• Reducing the number of stores to control cannibalization

• Renovating the coffee machines and introducing a new blend

• Offering customer incentives to bring back brand loyalty

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RESPONSE

Starbucks A Long History of Growth

6Source: Starbucks fiscal 2007 annual report

Starbucks' Same Store Sales Have Decreased Over The Past Three Years

7Source: Starbucks fiscal 2007 annual report

(Company-operated stores open 13 months or more)(%)

2002 2003 2004 2005 2006 2007

- 50%

Starbucks has attempted to turn this around by eliminating the lowest performing 100 stores

Starbucks Will Introduce a New Coffee Blend, and New Espresso Machines

• A new blend of coffee, Pike Place Roast

• New coffee machines and the acquisition of Clover

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RESPONSE

Starbucks Must Re-focus on Sales Growth

- The Starbucks Rewards Program initially will offer free "extras" for registered, card-carrying customers

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• Loyalty Card

RESPONSE

Starbucks Can Increase Sales Growth By Implementing Three Strategic Initiatives

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• Reducing the number of stores to control cannibalization

• Renovating the coffee machines and introducing a new blend

• Offering customer incentives to bring back brand loyalty

CONCLUSION

Thank You!

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